chinadaily.com.cn
    left corner left corner
    China Daily Website

    Ratings agency warns about rising debt

    Updated: 2013-02-26 10:13
    By Wei Tian ( China Daily)

    Ratings agency warns about rising debt

    A global credit war characterized by a surging money supply and currency depreciation, with undefined amounts and duration, will drag global credit into a currency crisis, Chinese ratings agency Dagong warned on Monday. [Photo / China Daily]

    Dagong says current pace of growth approaching 'unsustainable' levels

    Rising levels of sovereign debt in developed countries are posing a series of threats to emerging economies, China's leading credit rating agency has warned.

    In a report published on Monday, Dagong Global Credit Rating said this year the government debt of some already "highly indebted" developed countries - which accounts for 80 percent of outstanding global government debt - will continue moving toward what it called an "unsustainable state".

    It warned that it now expected an ongoing global credit war as a result, "characterized by surging money supply and currency depreciation", which would drag the global credit market into "a currency crisis".

    The Beijing-based ratings agency - which announced in October that it was partnering with agencies in the US and Russia in a bid to break the dominance of major ratings names such as Moody's in assessing national and company debt - estimates that the debt of these countries will reach 331 percent of their fiscal revenue (against 328.4 percent in 2012), and 123.5 percent of their GDP (120.9 percent in 2012).

    Ratings agency warns about rising debt

    Its report said the accommodative monetary policy of the US Federal Reserve has relied on the dollar's role as an international reserve currency, transferring its debt risk to creditor countries.

    In Japan, it added, sovereign credit risk is also on an upward trend, due to its inability to solve its underlying economic problems, with the government there resorting to an extreme loosening of its monetary policy to prop up a flat-lining economy.

    Meanwhile, the report added that recessionary fears across the eurozone are unlikely to dissipate in 2013, meaning sovereign debt levels in various European countries will remain.

    Dagong's comments came as Moody's Investors Service cut the sovereign credit rating for the United Kingdom on Friday from the highest Aaa to Aa1 - its latest in a series of downgrades of developed countries, since the US lost its triple-A rating in Aug 2011.

    "The main driver of our decision to downgrade is that despite considerable structural economic strength, the UK's economic growth will remain sluggish over the next few years owing to the slow growth of the global economy," said Sarah Carlson, Moody's lead analyst on the UK.

    The European Commission on Friday revised its 2013 GDP growth forecasts for the euro area and is now projecting a 0.3 percent contraction, rather than the 0.1 percent expansion it forecast just three months ago.

    Moody's announced it was also credit-negative on all eurozone sovereign debt.

    Dagong said it believed that measures to maintain high gross debt levels through continuously depressing interest rates and injecting liquidity cannot lead to a powerful expansion of a debt-ridden real economy.

    "Debtors are extremely sensitive to interest rates and new credit risks will surface if rates continue to rise," it said.

    Confronted with a credit war, emerging economies and low-income countries had again resorted to loosening monetary and fiscal policies, it added, in order to prevent a deterioration of their regional economies, which could also pose new challenges to sovereign credit risk.

    It said that China, on the other hand, had consolidated its sovereign credit strength by gradually activating domestic demand to achieve sustainable growth.

    The ratio of China's government debt as a percentage of its GDP reached a peak of 33.5 percent in 2010, and will gradually fall to 24 percent in 2014, according to Dagong estimates.

    But Zong Liang, deputy head of the international finance research institute of the Bank of China, said China still needs to take active measures to deal with the quantitative easing policies of developed countries.

    "We should preserve the continuity and stability of our monetary policy while still paying close attention to the inflow of hot money," he wrote in for Securities Daily.

    Zong suggested that the government could lower the threshold of commodity imports to lower prices and guard against possible price hikes triggered by quantitative easing.

    China should continue pushing forward the market-oriented exchange rate of RMB and allow more flexibility, to prevent global capital speculation, he added.

    weitian@chinadaily.com.cn

    8.03K
     
    ...
    ...
    ...
    亚洲精品人成无码中文毛片| 人妻少妇伦在线无码专区视频| 免费无码一区二区三区| 久久精品中文騷妇女内射| 国产在线精品无码二区| 亚洲国产精品成人AV无码久久综合影院 | 国产精品午夜福利在线无码| 久久久久亚洲AV片无码下载蜜桃| 中文字幕aⅴ人妻一区二区| 久久精品国产亚洲AV无码麻豆| 久久午夜福利无码1000合集| 久久精品中文字幕久久| 亚洲av无码一区二区三区人妖 | 日韩精品无码熟人妻视频| 无码播放一区二区三区| 久久精品?ⅴ无码中文字幕| 亚洲中文字幕久久精品无码APP | 熟妇人妻VA精品中文字幕| 免费一区二区无码视频在线播放 | 国产精品午夜无码AV天美传媒| 亚洲ⅴ国产v天堂a无码二区| 中文无码熟妇人妻AV在线| 国产高清中文欧美| 最近中文字幕免费mv在线视频| 人妻少妇精品中文字幕av蜜桃| 中中文字幕亚洲无线码| 亚洲精品无码av天堂| 亚洲精品无码久久久久AV麻豆| 亚洲av无码国产精品色在线看不卡 | 天堂中文8资源在线8| 欧美日韩中文国产va另类电影| 亚洲激情中文字幕| 亚洲日韩VA无码中文字幕| 制服中文字幕一区二区| 高清无码v视频日本www| 少妇无码太爽了在线播放| 亚洲爆乳无码一区二区三区| 少妇无码AV无码专区线| 久久亚洲精品无码播放| 亚洲av中文无码乱人伦在线播放 | 中文无码成人免费视频在线观看|